Retail Research

KDN:PQ/PP1505(10251)

T 23 December 2010

TECHNICAL WATCH B ur sa M alaysia

KLCI 52-wk range 1,528.01 - 1,233.86
By Dr. Nazri Khan, MSTA, CFTe M kt Cap (RM bn) 1,271.94
03-2145 8561 Vol (m shrs) 1,252.51
nazrikhan@affininvestmentbank.com.my Value (RM m) 1,602.63
KLCI futures (spot) 1,516.00
KLCI futures (1-mth) 1,518.00
KLC I Ind ex ( 12 - mt h)
Today’s Technical Highlights
Local Market Highlights – FBMKLCI (Bullish) 1,550.00

1,500 Broken Resistance Marks Strong Support 1,500.00

1,450.00

Price Catalyst Highlights (Bullish Bias) 1,400.00

Expects News Driven Bounce 1,350.00

1,300.00

Global Indices Highlights (Bullish Near Term) 1,250.00

Gaining Momentum 1,200.00

Dec-09 Mar-10 Jun-10 Sep-10 Dec-10

Sector Highlights – Trading Service Sector (Bullish) T o p 5 Gainer s

Shallow Correction Ends On A New Upleg Pr ice ( R M ) chg ( R M ) % chg
DIGI 25.90 0.90 3.6

Stocks Highlights – DRBHicom (Buy) NESTLE 43.70 0.70 1.6

Breaking Ascending Triangle Consolidation KLK 21.40 0.58 2.8

BAT 44.98 0.40 0.9
GENTING 10.80 0.34 3.3
Special Trade Highlights – Swiss Franc Futures (Buy)
T o p 5 Lo ser s
Rebounds Off Moving Average
Pr ice ( R M ) chg ( R M ) % chg
CEPCO 2.24 (0.45) (16.7)
Table Highlights (Bullish)
UTDPLT 17.04 (0.26) (1.5)
Nearing 52 Week High M QTECH 0.10 (0.14) (58.3)
KULIM 12.74 (0.12) (0.9)
TCHONG 5.19 (0.11) (2.1)
T o p 5 V alue T r ad ed
Pr ice ( R M ) chg ( R M ) V al ( R M m)
KNM 2.91 0.22 111.1
PCHEM 5.57 0.02 71.7
IOICORP 5.81 0.02 52.2
AM M B 7.05 0.28 46.5
TENAGA 8.30 (0.01) 44.8
Key Eq uit y Ind ices
C lo se % chg Y t d chg ( %)
KLCI 1,515.05 0.66 19.0
Dow Jones 11,559.49 0.23 10.8
Other Markets Key Indicators Nasdaq 2,671.48 0.15 17.7
FTSE100 5,983.49 0.53 10.5
East. Europe 2,384.85 0.14 6.8
C O M M O D I T I ES C U R R EN C I ES M exico 38,172.91 (0.15) 18.8
Lat est chg ( %) Lat est Y t d chg ( %)
Shenzen B 1,338.20 (0.81) 11.4
CPO (RM / Tonne) RM / US$ 3.13 9.5
Spot (Aug) 3,668.0 1.6 RM per 100 Yen 3.75 (1.7) Shanghai B 2,877.90 (0.90) (12.2)
3-mt h f ut ures (Nov) 3,593.0 1.7 RM / S$ 2.39 1.8 Hong Kong 23,045.19 0.22 5.4
Crude oil (US$/ brl) Yen/ US$ 83.58 11.3 Korea 2,038.11 0.05 21.1
Spot 90.5 0.7 Eur/ US$ 0.76 9.4
Singapore 3,144.31 0.14 8.5
1-mt h f ut ures 91.2 0.6
Gold (US$/ oz) M A LA Y SI A I N T ER EST R A T ES Indonesia 3,620.68 (0.46) 42.9
Spot 1,386.8 (0.1) Lat estY t d chg ( b p s) Philippines 4,113.69 0.53 34.8
1-mt h f ut ures 1,387.0 (0.1) OPR (%) 2.75 75.0
Thailand 1,019.14 0.59 38.7
3-mt h Klibor (%) 2.97 80.0
Vietnam 481.53 (0.05) (2.7)
M aybank BLR (%) * 6.30 75.0
* Last r evised on 13 July 2010 India 20,015.80 0.76 14.6
Taiwan 8,860.49 0.37 8.2
1. LOCAL MARKET HIGHLIGHTS – 1,500 Broken Resistance Marks Strong Support : Bullish

FBMKLCI DAILY CHART – Rises Strongly With Good Volume

We can sense that the bull is back in full force yesterday. The FBMKLCI intially took a hard hit at the late of November, but
ultimately held support and formed a potentially bullish wedge in the last few weeks. A review of the long-term trend with the
weekly chart suggest more upside in the near term. A close look at the chart shows FBMKLCI breaking the June trendline with
a surge above 1480 in mid November. Despite a long black candlestick and sharp decline three week’s ago, the local
benchmark confirmed that the last two weeks rally and the breakout is holding. Long-term momentum also remains bullish as
the histogram for MACD remains in positive territory. The histogram is positive when MACD is above its signal line. A close look
at the hourly chart further shows a shorter timeframe with FBMKLCI bouncing off broken resistance. A falling wedge has
formed over the last three days with the local index retracing 38% of the November surge. Shorter retracements are more
bullish than longer retracements because they reflect less selling pressure on the pullback. Even so, the wedge is still falling
with last week’s highs marking intraday resistance just above 1510. Obviously the index has successfully challenged this
resistance level today and a break today would signal a continuation of the November advance towards 1530 and 1550.
Overall, traders should expect more upside and continue buying equities on weakness in the coming week.

FBMKLCI Price 1515.05, +9.87, +0.21%

Volume
Breadth
Support Levels
Resistance Levels
FBMKLCI Technical Call
Best Sector To Buy
Best Stock To Buy
1253.11 mn shares, RM 1664.04 mn
394 Advancers 374 Decliners
1,500 and 1,480
1,520 and 1,530
BUY , Target : 1,550, Stop Loss : 1,445
Trading Service Sector (Bullish)
DRBHicom (Buy)

Page 2 of 12
2. PRICE CATALYST HIGHLIGHTS – Expects News Driven Bounce : Bullish Bias

2:45am EUR French Consumer Spending m/m

4:30am GBP BBA Mortgage Approvals
8:30am CAD GDP m/m
8:30am USD Core Durable Goods Orders m/m
8:30am USD Unemployment Claims
8:30am USD Core PCE Price Index m/m
8:30am USD Durable Goods Orders m/m
8:30am USD Personal Spending m/m
9:55am USD Revised UoM Consumer Sentiment
10:00am USD New Home Sales

3. GLOBAL INDICES HIGHLIGHTS – Gaining Momentum : Overall Bullish

FBMKLCI – Slow Consolidation : Bullish

Our View : Neutral near term but a break above 1,500 support level suggests more upside ahead in the local broad market.
Our Preference: The upside penetration of 1,500 will call for long towards 1,524.
Alternative Scenario: Short positions below 1,450 with 1,400 as the next target.

Page 3 of 12
USA DOW JONES – Set To Fly : Bullish

Our View : Bullish near term with a breakout from 11,000 range with a spotted bullish white candle.
Our Preference: Long positions above 11,200 with 11,800 as the next target.
Alternative Scenario: The downside penetration of 10,000 will call for a short towards 9,600.

JAPAN NIKKEI – Risk Taking Appetite : Bullish

Our View : Bullish near term reinforced by a close above the 9,000 support level.
Our Preference: Given the strong rebound from 9,000 support level, we favour an upside move towards 10,200 as the next
targets.
Alternative Scenario: A break below 9,000 would invalidate our bullish scenario. The index could then move back to 8,200.

Page 4 of 12
HONG KONG HANG SENG – Key Reversal Day : Bullish

Our View : Bullish near term with a spotted long white candle above 23,000 support level.
Our Preference: Only the downside breakdown of 23,000 will invalidate our bullish scenario. In this case, a rally should shape
towards 26,000.
Alternative Scenario: Once 23,000 support is broken, a decline towards 20,500 seems likely.

AUSTRALIA ASX – Crossing Moving Averages : Bullish

Our View : Despite weakness near term, still healthy with a positive moving average crossover.
Our Preference: Long positions above 4,800 with 5,000 as next targets.
Alternative Scenario: The downside penetration of 4,500 will call for short towards 4,300.

Page 5 of 12
CHINA SHANGHAI COMPOSITE – Bearish Engulfing Candle : Bearish

Our View : Bearish near term as 3,000 support level was broken.
Our Preference: An downside penetration of 3,000 would call for a follow through break towards 2,600.
Alternative Scenario: The crucial 3,000 psycho support must be broken to the upside to allow a rally towards 3,400 target level.

INDIA SENSEX INDEX – Short Term Downtrend Ends : Bullish

Our View : Bullish near term with a long white candle appeared after scoring a fresh 52 week high price.
Our Preference: Once 19,500 resistance level is taken overt, a rally towards 22,000 is possible as the next psycho resistance
level.
Alternative Scenario: A downside penetration of 19,500 would call for a decline towards 18,000.

Page 6 of 12
4. SECTORS HIGHLIGHTS – Shallow Correction Ends On A New Upleg : Bullish

With a 5% percent correction the last 4 weeks, the trading service sector index is now poised for a new upleg before hitting the
190 resistance line of a broadening formation. The swing within this formation is still up as the sector makes a quick pullback
with most oscillators remains in overbought territory. A trendline break and move below 170 would provide the first signs of a
deeper pullback. Despite that, the sector shows impressive huge accumulation volume with higher highs and higher lows as
well as with rising momentum. The sector has just completed a cup handle breakout with positive moving average suggesting
stronger price ahead. The higher smart funds volume basically reflects insider interest and bottom picking activities calling for
200 as the immediate upside target for the sector index. Given that, the long term picture of the sector is definitely bullish with
its near two years uptrendline remain sound and intact.

Page 7 of 12
5. STOCK HIGHLIGHTS – DRBHicom Breaks Ascending Triangle Formation : Buy

DRBHicom : Pattern Breakout

DRB-Hicom Berhad is an investment holding company. The Company, through its subsidiaries, develops, assembles, and sells
motor vehicles and military vehicles as well as operates in property development and construction work. DRB-Hicom also
trades electrical and engineering products, manages hotel and resort, provides airline and transportation services, and
underwrites general insurance.

DRBHicom shows robust technical strength with a strong buying opportunity after breaking its twenty two months triangle
consolidation at RM1.40. The industrial stock has consistently found support at the 20 moving average line spotted since July
2010 and is now ready to fly higher again. The stock has decisively penetrated its upper triangle line on high volume and is
currently in the first upleg with rising CCI and Stochastics after having just recently produced a healthy volume accumulation
pattern. A close above solid technical resistance-turned-support at RM1.60 will provide the bulls with more upside technical
momentum towards RM2.00. The MACD and RSI remain positive and currently are on the upswing modes. The upside price
objective would be RM2.00 followed by RM2.20. Strong technical and psychological support, for which to buy on weakness and
to place a protective sell stop just below, is located at RM1.60 followed by RM1.20.

Page 8 of 12
6. SPECIAL TRADE HIGHLIGHTS – Swiss Franc Futures Rebounds Off Moving Average : Bullish

Swiss franc futures prices at the Global Electronic Exchange (Globex) ends a corrective leg by bouncing into a fresh five week
high of USD1.0341. Despite a short term correction last few days, recent price action has been extremely bullish, from a
technical perspective especially when it occurs near a critical 20 week moving average. This month alone, the leading
European currency futures prices have already pushed well above parity with a broken 20 weekly moving average. Traders can
also note that the giant double bottom consolidation has broken for now which suggest more bullishness ahead. The next
upside near-term price objective for the swiss market bulls is to produce a close above immediate resistance at the USD1.0600
level. As USD1.0000 parity resistance has been broken, our preferred view is for the futures to rally towards USD1.0400
followed by 1.0600 within several months. A downside penetration of USD1.0000 support level would call for a decline towards
USD0.9800 which can be a low probability case as at current scenario.

Page 9 of 12
7. TABLE HIGHLIGHTS – Nearing 52 Week High : Bullish

FAVOURITE BUY STOCKS

Stocks Technical Last Target Stop S1 S2 R1 R2 Remark

Call Price Loss
DRBHicom Buy 1.91 2.20 1.10 1.60 1.20 2.00 2.20 Bullish ascending
triangle breakout
AMMB Buy 7.05 7.80 4.40 5.60 5.00 7.00 7.80 Bullish pennant
consolidation in
progress
Sunway Buy 2.29 3.00 1.95 2.05 1.75 2.50 3.00 Bullish parabolic curve
KL Kepong Buy 21.40 24.00 19.90 20.00 18.50 22.00 24.00 Bullish flag breakout
HSPlant Buy 3.15 3.80 2.30 2.70 2.40 3.30 3.80 Bullish cup and handle
breakout
Malton Buy 0.75 1.40 0.35 0.50 0.40 1.00 1.40 Bullish triangle
breakout
Dialog Buy 1.81 2.00 1.15 1.40 1.20 1.80 2.00 Bullish parabolic curve
Sunreit Buy 1.01 1.20 0.94 0.97 0.95 1.05 1.20 Bullish ascending
triangle breakout
IJMLand Buy 3.19 3.80 2.75 2.80 2.00 3.20 3.80 Bullish triangle
breakout
F&N Buy 14.84 17.80 13.10 13.50 12.00 16.50 17.80 Bullish triangle
breakout
OSK Buy 2.07 3.00 1.45 1.70 1.50 2.00 3.00 Bullish cup and handle
breakout
Siggas Buy 1.04 2.00 0.90 1.10 1.00 1.50 2.00 Bullish ascending
triangle breakout
Proton Buy 4.63 6.00 3.10 4.00 3.20 5.40 6.00 Solid moving average
crossover
IJM Buy 6.46 6.50 4.70 5.00 4.80 6.00 6.50 Channelline breakout
UEMLand Buy 2.51 3.00 1.90 2.00 1.80 2.50 3.00 Bullish rectangle
breakout
Gamuda Buy 3.81 4.60 2.50 3.00 2.60 3.80 4.60 Bullish cup handle
breakout
Genting Buy 10.80 12.00 7.45 8.50 7.50 11.20 12.00 Bullish parabolic curve
RHBCap Buy 8.60 9.00 5.50 6.20 5.60 7.50 9.00 Solid uptrendline
Maybank Buy 8.50 10.00 6.90 7.50 7.00 8.20 10.00 Solid upchannelline
Airasia Buy 2.68 3.00 1.40 1.50 1.30 1.90 3.00 Bullish weekly white
candle
MRCB Buy 2.68 2.50 1.10 1.40 1.20 1.80 2.50 Solid upchannelline

TECHNICAL BUY ALERTS

Stocks Price Signals Alerts

AZRB 1.10 MACD Crossover
BIMB 1.44 MACD Crossover
Batu Kawan 16.42 MACD Crossover
CCK 0.75 MACD Crossover
Dolmite 0.20 MACD Crossover
Choobee 1.75 MACD Crossover

TECHNICAL SELL ALERTS

Stocks Price Signals Alerts

Atlan 3.20 MACD Crossover
Bonia 1.75 MACD Crossover
CCK 0.75 MACD Crossover
KLCC Prop 3.34 MACD Crossover
HLBank 9.26 MACD Crossover
KEuro 1.30 MACD Crossover

Page 10 of 12
SPECIAL TRADE

Futures Technical Last Target Stop S1 S2 R1 R2 Remark

Instrument Call Price Loss
(USD)
Swiss Buy 1.0519 1.0600 0.9990 1.0000 0.9800 1.0400 1.0600 Bullish double bottom
Franc pattern
Futures
Platinum Buy 1,725 2,000 1,590 1,600 1,400 1,800 2,000 Bullish cup and handle
Futures in progress
Cocoa Buy 2,970 3,500 2790 2800 2600 3200 3500 Bullish moving
Futures average penetration
Natural Gas Buy 4.112 5.000 3.990 4.000 3.400 4.500 5.000 Bullish moving
Futures average penetration
Coffee Buy 230.20 240.00 199.00 200.00 180.00 220.00 240.00 Bullish cup and handle
Futures breakout
Yen Buy 119.80 125.00 118.90 119.00 115.00 120.00 125.00 Bullish ascending
Futures triangle breakout
Copper Buy 4.2720 4.1000 3.5900 3.8000 3.6000 4.0000 4.1000 Bullish range breakout
Futures
Cotton Buy 154.12 160.00 119.00 120.00 100.00 135.00 160.00 Bullish parabolic curve
Futures
Gold Buy 1,385 1,500 1,150 1,300 1,200 1,400 1,500 Solid monthly uptrend
Futures
Light Crude Buy 90.57 90.00 69.90 70.00 60.00 82.00 90.00 Bullish double bottom
Oil Futures pattern
Euro Buy 1.3100 1.4000 1.2990 1.3000 1.2500 1.3500 1.4000 Bullish double bottom
Futures pattern

LOCAL VIEW

Indices Price 1 Month % 3 Month % Technical View

Changes Changes
Trading Services 189.70 1.4 3.0 Bullish
Finance 13874.39 0.7 4.1 Bullish
Industrial 2810.31 -2.1 0.4 Bullish
Industrial Products 111.09 1.6 6.0 Bullish
Properties 1027.38 3.0 15.6 Bullish
Construction 287.94 4.0 10.0 Bullish
Plantation 7922.12 2.5 15.0 Bullish
Mining 672.78 5.7 22.2 Bullish
Technology 18.11 -4.0 -6.8 Bullish
Consumer 447.48 -1.8 1.5 Bullish
FBMKLCI 1515.05 0.8 2.8 Bullish
FBM70 10899.96 4.0 13.0 Bullish
FBMEmas 10355.45 1.5 5.1 Bullish
FBMSCap 12608.95 2.4 8.8 Neutral

GLOBAL VIEW

Indices Price 1 Day % Technical View

Changes
Dow Jones Futures 11490.00 0.10 Bullish
S&P 500 Futures 1242.35 -0.08 Bullish
Nasdaq Futures 2222.92 0.12 Bullish
Crude Oil Futures 81.85 1.75 Bearish
Gold Futures 1385.35 0.00 Bullish
Copper Futures 426.90 -0.04 Bullish
Euro Futures 1.31 0.05 Bullish
British Pound Futures 1.54 0.06 Bullish
USDMYR Spot 3.13 -0.14 Bullish
CPO Futures 3665.00 0.41 Bullish
FBMKLCI Futures 1516.00 0.13 Bullish

Page 11 of 12
This report is intended for information purposes only and has been prepared by Affin Investment Bank Berhad (“Affin Investment Bank”) based
on sources believed to be reliable. However, such sources have not been independently verified by Affin Investment Bank, and as such Affin
Investment Bank does not give any guarantee, representation or warranty (express or implied) as to the adequacy, accuracy, reliability or
completeness of the information and/or opinion provided or rendered in this report. Facts, information, views and/or opinion presented in this
report have not been reviewed by, may not reflect information known to, and may present a differing view expressed by other business units
within Affin Investment Bank, including investment banking personnel. Reports issued by Affin Investment Bank are prepared in accordance with
Affin Investment Bank’s policies for managing conflicts of interest arising as a result of publication and distribution of investment research
reports. Under no circumstances shall Affin Investment Bank, its associates and/or any person related to it be liable in any manner whatsoever
for any consequences (including but are not limited to any direct, indirect or consequential losses, loss of profit and damages) arising from the
use of or reliance on the information and/or opinion provided or rendered in this report. Any opinions or estimates in this report are that of Affin
Investment Bank as of this date and subject to change without prior notice. Under no circumstances shall this report be construed as an offer to
sell or a solicitation of an offer to buy any securities. Affin Investment Bank and/or any of its directors and/or employees may have an interest in
the securities mentioned therein. Affin Investment Bank may also make investment decisions or take proprietary positions that are inconsistent
with the recommendations or views in this report.

Comments and recommendations stated here rely on the individual opinions of the ones providing these comments and recommendations.
These opinions may not fit to your financial status, risk and return preferences and hence an independent evaluation is essential. Investors are
advised to independently evaluate particular investments and strategies and to seek independent financial, legal and other advice on the
information and/or opinion contained in this report before investing or participating in any of the securities or investment strategies or
transactions discussed in this report.

Third-party data providers make no warranties or representations of any kind relating to the accuracy, completeness, or timeliness of the data
they provide and shall not have liability for any damages of any kind relating to such data.

Affin Investment Bank’s research, or any portion thereof may not be reprinted, sold or redistributed without the consent of Affin Investment Bank.

Affin Investment Bank is a participant of the Capital Market Development Fund-Bursa Research Scheme, and will receive compensation for the
participation.

Affin Investment Bank Bhd (9999-V)

A Participating Organisation of Bursa Malaysia
Securities Bhd

www.affininvestmentbank.com.my
Email : research@affininvestmentbank.com.my
Tel : + 603 2143 8668
Fax : + 603 2145 3005

Page 12 of 12